THE HEALTH SYSTEMS
OF CANADA & THE USA
Pauline Vaillancourt Rosenau, Ph.D.
Division of Management, Policy, and
Community Health
UT Houston - School of Public Health
Pauline.Rosenau@uth.tmc.edu
for
Doctor of Nursing Practice students
Room 706
University of Texas School of Nursing
Thursday, February 17, 2011
OVERVIEW







Describe the Canadian health system and
clear up some myths
Compare the two countries on Costs
How patients experience it
How hospitals and doctors experience it
Judging Canada and the USA on performance
Strengths and Weakness of each
Try to figure out why
2
THE FIVE PILLARS OF THE
“CANADA HEALTH ACT”
 Public
administration
 Comprehensiveness
 Portability
 Universality
 Accessibility
3
LIVING AND WORKING IN THE
CANADIAN SYSTEM
 With
few exceptions, Canadians NEVER worry
about incurring health care expenses.
 Nor
do Canadians have to submit claims to
insurers.
 Providers
have ONE payer to submit claims to:
the provincial government.
 Canadian
system is largely funded by general
tax revenue - 25-50% federal.
4
THE CANADIAN HEALTH SYSTEM:
TRUE OR FALSE?

Canada is “single payer” system?

False: it is 10 payer provincial health systems with
“portability”

Each province is like one big HMO: True

The Canadian health system is “socialist”:

False, most providers do not work for the government but
are rather paid by a piece rate system and hospitals are not
owned by the government
5
THE CANADIAN HEALTH SYSTEM:
TRUE OR FALSE?

The Canadian government controls the health
system top – down


False: federal – provincial authorities negotiate the basics ;
for example privatization
In Canada the bureaucracy wastes precious
health care resources?



False:
The % of $ used for administration is much lower in
Canada than in the USA
Billing is straightforward and electronic with 95% of
requested reimbursements completed.
6
THE CANADIAN HEALTH SYSTEM:
TRUE OR FALSE?

In Canada the government controls prices?


Canadians ration care by age, need, and SES


False: The government sets a budget, the doctors set
the payment rates in most provinces
False: there are no policies that restrict care on the
basis of age, need, or socioeconomic status. Such
discrimination is illegal
Canada allows euthanasia.

False: Some US states have laws permitting
euthanasia but none of the provinces in Canada do.
7
USA COSTS WAY MORE
THAN OTHER COUNTRIES
8
Health expenditure per capita varies widely across OECD
countries.
The United States spends almost two-and-a-half times the OECD
200
Average
7
1. Health expenditure is for the insured population rather than resident population.
2. Current health expenditure.
Source: OECD Health Data 2009, OECD (http://www.oecd.org/health/healthdata).
9
10
See slide : Commonwealth Fund International Health Policy Survey: Adults’ Health Experiences in seven
Countries, 2007 – for methodology
INTERNATIONAL COMPARISON OF SPENDING ON HEALTH, 1980–2008
Total expenditures on health
as percent of GDP
Average spending on health
per capita ($US PPP)
16
7000
6000
5000
4000
United States
Norway
Switzerland
Canada
Netherlands
Germany
France
Denmark
Australia
Sweden
United Kingdom
New Zealand
14
12
10
8
2000
4
1000
2
0
0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
3000
6
Source: OECD Health Data 2010 (June 2010).
United States
France
Switzerland
Germany
Canada
Netherlands
New Zealand
Denmark
Sweden
United Kingdom
Norway
Australia
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
8000
12
See slide : Commonwealth Fund International Health Policy Survey: Adults’ Health Experiences in seven
Countries, 2007 – for methodology
WHY IS DOES THE US HEALTH SYSTEM
COST SO MUCH?
Administration accounted for the largest
share of this difference (39%),
 Payments to MDs and hospitals accounted for
(31%) of the next most important variables
explaining difference
 More intensive provision of medical services
accounted for the was the third most
important variable in explaining the
difference (14%).


Research by professors from Harvard and Un. Of California in
summer 2010; Inquiry
13
14
Pozen and Cutler. Inquiry. 2010 Summer;47(2):124-34
EXHIBIT 12. HIGH U.S. INSURANCE OVERHEAD:
INSURANCE-RELATED ADMINISTRATIVE COSTS
Spending on Health Insurance Administration
per Capita, 2007

Fragmented payers + complexity =
high transaction costs and overhead
costs


McKinsey estimates adds
$90 billion per year*
$600
$516
$500
$400
Insurance and providers


Variation in benefits; lack of
coherence in payment
$300
Time and people expense for
doctors/hospitals
$200
$247
$220
$198 $191
$140
$86
$100
$76
$0
US
FR
SWIZ
NETH
GER
CAN
* 2006
Source: 2009 OECD Health Data (June 2009).
* McKinsey Global Institute, Accounting for the Costs of U.S. Health Care: A New Look at Why Americans Spend
More (New York: McKinsey, Nov. 2008).
AUS*
OECD
Median
AND IT IS ALSO ABOUT GOVERNMENT
INTERVENTION AND REGULATION
Canadians think they have “good
government”
 Americans distrust their government
 Canadians are comfortable with price
controls in the health sector
 Price controls in the health sector yield
lower costs
 Unlike other economic sectors unfettered
market competition does not lower costs

16
PHARMACEUTICAL SPENDING PER CAPITA: 1995 AND 2007
ADJUSTED FOR DIFFERENCES IN COST OF LIVING
$210
NETH
1995
$422
2007
$228
AUS
$431
$317
GER
$542
*
$335
FR
$588
$319
CAN
$691
$385
US
$878
$0
$200
* 2006
Source: OECD Health Data 2009 (June 2009).
$400
$600
$800
$1,000
ANNUAL SALARY RANGE FOR
REGISTERED NURSING JOBS IN CANADA
Province
step One
Top of scale
Quebec
$40,927
$60,319
Ontario
$57,252
$81,315
$82,258 after 25 yrs of service
18
HOW MEDICINE IS PRACTICED IN
CANADA AND THE USA: FROM
THE PATIENT’S POINT OF VIEW –
ABOUT THE SAME
19
20
See slide : Commonwealth Fund International Health Policy Survey of Primary Care Physicians, 2006– for
methodology
21
See slide : Commonwealth Fund International Health Policy Survey of Primary Care Physicians, 2006– for
methodology
22
See slide : Commonwealth Fund International Health Policy Survey of Primary Care Physicians, 2006– for
methodology
23
See slide : Commonwealth Fund International Health Policy Survey of Primary Care Physicians, 2006– for
methodology
HOW DO DOCTORS AND
HOSPITALS GET PAID IN
CANADA AND THE USA
24
PAYMENTS IN CANADA







http://www.health.gov.bc.ca/msp/infoprac/physbilling/payschedule/index.html
http://www.health.gov.bc.ca/msp/infoprac/physbilling/payschedule/pdf/26.%20obstetrics_
gynecology.pdf
25

Fee for service for most primary care and specialists - bills
sent to the province
Extra-billing of patient is NOT permitted
No individual bills are prepared for patients
Hospitals (largely private nonprofit) are paid on global
budget system with funds sent by the province; some
regional health authorities obtain population-based
funding (west) (HiT 2004)
Payment for pharmaceuticals varies by province and
formularies are set up at the provincial level
What Canadian doctors are paid for treatments and
procedures: ex. Gynecologist paid $45 for visit in B.C.
HOW DOCTORS BILL IN CANADA
Billing is straightforward but lots of variation
across provinces as each takes care of its on billing
 Doctor must be registered as a practitioner in the
province
 Doctor must have a billing number – and not
automatic
 Doctor must be eligible and qualified to bill for the
specific code indicated: ex. neurologist won’t be paid
for doing an appendectomy.
 The amount billed must be for the amount allowed
by the fee schedule (Medical Services Plan)

26
HOW DOCTORS BILL IN CANADA (CONT..)
Bills are submitted electronically on forms online
through the web or via a direct connection to the
MSP office – daily or weekly- and 98% reimbursed
 The provincial payer organization sends payment
twice monthly directly to the MD and pay interest
on reimbursements that are delayed more than 30
days.
 Ease of billing is a big plus in Canada and doctors
who have billed in both Texas and Canada are in
agreement on this : “One insurer, one fee
schedule, rarely any question of eligibility
and no incentive to withhold payment – its
heaven compared to the US”.

27
OUTCOMES IN THE CANADIAN
HEALTH SYSTEM:CANADA
DOESN’T DO TOO BADLY…
28
OVERVIEW: AMERICANS AND CANADIANS
ON ACCESS AND HEALTH OUTCOMES
Very poor Americans are in poorer health than
their Canadian counterparts
 Wealthy Americans and Canadians – equally
healthy
 Little difference between insured Americans and
Canadians as a whole -- on access to health care
and health status
 Americans without health insurance are –
different, with low access to health care and more
“unmet health care needs”


Alexis Pozen, David M. Cutler (2010) Medical Spending Differences in the United States and Canada: The Role of Prices, Procedures, and
Administrative Expenses. Inquiry: Summer 2010, Vol. 47, No. 2, pp. 124-134.
29
BUT THERE ARE WIDE VARIATIONS ON HEALTH LIFESTYLES
30
Reference: Krueger, Bhaloo, & Rosenau; “Health Lifestyles in the U.S. and Canada: Are We Really So Different?
“Forthcoming Social Science Quarterly, December 2009
COMPARISON OF U.S. AND CANADA: OUTCOMES
Indicator
Canada
United States
Low Birth Weight Babies
6%
8%
MDs per 10,000 population
19
27
Nurses and Midwives per
10,000
100
98
Infant Mortality Rate
5.04
6.26
Life Expectancy – Female
83
81
Life Expectancy – Male
79
76
31
http://www.globalhealthfacts.org
The BEST Outcomes Measure
32
See slide : Measuring The Health of Nations: Mortality Amenable to Health Care, 2008– for methodology
SPECIFIC OUTCOMES - MORTALITY
RATES
 Seven
diseases favored Canada

Colorectal cancer

Childhood leukemia

Kidney transplants

Liver transplants
 One

disease favors the U.S.
Breast cancer
Hussey, P. et al, “How Does the Quality of Care Compare in Five
Countries?” Health Affairs 23(3) May/June 2004
33
SPECIFIC OUTCOMES- MORTALITY
RATES
 Overall
RR of mortality 0.95 in favor of
Canada (CI 0.92 to 0.98)
 Results
 No
quite heterogeneous
explanation for heterogeneity
Guyatt, G. et al, “A Systematic Review of Studies Comparing Health Outcomes in
Canada and the United States”, Open Medicine 2007;1(1):E27-36
34
WAIT TIMES
 Historically
this has been the Achilles
heel of the Canadian system

Result of budget cuts 1990’s

Today the situation is much improved
 But
the U.S. also has a “waiting times”
problem, but for different reasons
 In
the US we wait because of cost…..
 In
Canada patients because of scarcity
35
36
See slide : Commonwealth Fund International Health Policy Survey: Adults’ Health Experiences in seven
Countries, 2007 – for methodology
37
See slide : Commonwealth Fund International Health Policy Survey: Adults’ Health Experiences in seven
Countries, 2007 – for methodology
SUMMING IT ALL UP
Strengths and Weaknesses
And figuring out why….
CANADA – HEALTH POLICY STRENGTHS
 Federal
leadership, with state
autonomy on implementation, is a
workable compromise
 Access
is best when it is universal
 Choice
is ok – one big HMO
 Primary
care emphasis is important
 Electronic
medical records are not
essential
39
WHAT CANADIANS SEE AS THEIR
SYSTEMS WEAKNESSES




Waiting lists can be overused as “supply side”
control mechanisms even if the MDs are in
charge.
“Costs in Canada are too high.” Really? I
guess it is always relative to your perspective.
Tolerance of a private sector “safety valve”
may be essential if universal access is to be
preserved
http://www.oecd.org/dataoecd/51/48/41925333.pdf
40
USA - STRENGTHS
 Quality
generally high
Lots of evidence that “more is not always
better” when it comes to healthcare
 But many patients don’t understand this or
believe it.

technology is available…
if you are well insured…
 if not insured or underinsured… ?

 No
waiting if you pay out of pocket.
41
 Medical
USA - WEAKNESSES
 Cost
- are way higher than in
every other industrialized country
with little to show for it.
 Accessibility – may get better after
2014 ?
 Administrative costs are high and
this is unlikely to change after
health reform is implemented.
42
WHY DO THE TWO COUNTRIES DIFFER AS TO
HEALTH SYSTEM PREFERENCE?

Culture – maybe but USA and Canada are converging; media,
proximity, culture diffusion, geographic mobility and immigration

History – Yes
More distrust of government in US
 More emphasis on individual liberty


Form of government – yes
 Presidential system in the USA



Roots in the constitution
Designed to require incremental policy rather than comprehensive
policy
Parliamentary system in Canada



Good at implementing comprehensive change quickly and
efficiently
Responsible party model
Important role for party leadership
43
SENATOR MITCH MCCONNELL SAID CANADIAN SHONA HOLMES HAD
“BRAIN CANCER”
HTTP://PATIENTSUNITEDNOW.COM/?Q=SEARCH/NODE/ENTER%20KEYWORDS
"I knew in my gut that I had to see
someone and could not wait five to six
months," she says. So she called Mayo
Clinic and got an appointment the same
day.
Featured on the Mayo
clinic website
.http://www.mayoclinic.org/patientstories/story339.html
Diagnosis: Rathke’s
Cleft Cyst on pituitary
gland -- a benign cyst
 Wait time in Canada
would have been three
months with no copay,
no deductible
 Cost for removal at
Mayo Clinic = $97,000

44
EXAMPLE OF MEDIA COVERAGE IN THE USA




The Case of Shona Holmes:
http://www.youtube.com/watch?v=cahvnCBVXXU&feature=related
http://factcheck.org/2009/08/dying-on-a-wait-list/ same as above with Fact
Check information
Mayo clinic charged 100,000$ - Shona’s story is no longer posted at
Mayo Clinic’s website
Dr. Jason Huse, a pathologist at the Sloan-Kettering Cancer Center, in
the USA . Factcheck.org says: “He told us something different.” "By strict
definitions it’s not even a tumor," he said, but a remnant of embryological
structures that eventually develop into the pituitary gland. Huse stressed
that without having examined Holmes, he couldn’t know the prognosis of
her RCC: "It is not out of the realm of possibility," he told us, "that this
could have been impeding her hormone secretions to the extent that it
was a life-threatening situation." And of course, we don’t know what
Holmes’ American doctors told her. However, Huse said, RCC "is not
typically a malignant lesion and it is not typically life-threatening."
45
“U.S. NEWSPAPER COVERAGE OF THE CANADIAN
HEALTH SYSTEM: A CASE OF SERIOUSLY
MISTAKEN IDENTITY” A . R . C
S
–S
2006,
27-58
MER
EV OF
ANADIAN
TUDIES
PRING
PP
Objective: This study assesses the fairness,
accuracy, and comprehensiveness of U.S.
newspaper coverage of the Canadian health
system in two of the most influential newspapers
published in the U.S.
 Methods: Quantitative methods, interpretative
assessments, and thematic analyses are
employed to evaluate coverage of the Canadian
health system in the New York Times and the
Wall Street Journal between 2000 and 2005

46
U.S. NEWSPAPER COVERAGE …2








Findings: U.S. newspaper reporting on the topic of the Canadian health
system is found to be poor. Points of misinformation are indicated,
misrepresentations are specified, and inadequate explanations are
denoted.
Overall, ongoing themes and controversial issues regarding the
Canadian health system receive almost as much notice in U.S.
newspapers as actual news events.
Anecdotal information plays nearly as great a role in coverage as facts
and evidence.
U.S. newspaper reports about the Canadian health system are found to be
oversimplified.
Information, all too often, is presented out of context and sources are not
always sufficiently identified.
Coverage is incomplete: all provinces are underrepresented in the U.S.
newspapers studied, except Ontario.
Some articles are confused and a few were found to contain errors.
Conclusions: These inadequacies in newspaper coverage mean that the
U.S. public is sadly misinformed with regard to the Canadian health
system.
47
REFERENCES FOR LEARNING
MORE

And documentation for this lecture
48
RESOURCES FOR LEARNING MORE ABOUT CANADA






Listen or View: “Does Canada's Health Care System Need Fixing? 10 August
2009” NPR http://www.npr.org/templates/story/story.php?storyId=111721651
Read: Ross and Detsky “Health Care Choices and Decisions in the U.S. and
Canada”; JAMA 10/28/2009 ; 2009;302(16):1803-4, http://jama.amaassn.org/cgi/reprint/302/16/1803
Read; Sanmartin, et al “Comparing Health and Health Care Use In Canada and
the United States,” Health Affairs, vol. 25, July/August 2006 “ (Abstract )
http://content.healthaffairs.org/cgi/content/abstract/25/4/1133
View : “Sicko” by Michael Moore; Scene Selection # 7 Only “Canada!”: about 10
minutes that begins at minute= 40. See especially the Conservative
party member (golfer interview) at Minute 48
http://freedocumentaries.org/teatro.php?filmID=133&lan=undefined&si
ze=undefined
Listen: Audio Interview and Review of “Sicko” by Jonathan Oberlander –
University of North Carolina; for ‘NPR’s program, Fresh Air” 2007. only the
first 15 minutes are relevant - about Sicko’s presentation of Canada
http://www.npr.org/templates/story/story.php?storyId=11826524
And investigate other countries such as Britain, Germany, Japan, Taiwan,
Switzerland at: http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/view/
49
METHODOLOGY: COMMONWEALTH FUND
INTERNATIONAL HEALTH POLICY SURVEY: ADULTS’
HEALTH EXPERIENCES IN SEVEN COUNTRIES, 2007


Survey of comparing Adults’ health care experiences in Australia,
Canada, Germany, New Zealand, the Netherlands, the United
Kingdom and the United States.
Method:





Interviews with representative sample of adults, Age >17years, 2,500 in the United
States and 3,000 in Canada. Funded by the Commonwealth Fund, partnered with
the Health Council of Canada to expand Canadian Sample.
Interviews conducted by telephone between 6 March and 7 May 2007 by Harris
Interactive and Country affiliates
Conducted in different languages; French and English for Canada while Spanish
and English in US
The margin of sample error for country averages is approximately + 2 percent for
the US and Canada and + 3 percent for other five countries, at 95% confidence
interval.
Peer Reviewed Publication Citation: Schoen, C., Osborn, R., Doty, MM., et al.
Toward Higher-Performance Health Systems: Adults’ Health Care Experience in
Seven Countries, 2007. Health Affairs (2007) 26(6) w717-w734
50
METHODOLOGY: COMMONWEALTH FUND
INTERNATIONAL HEALTH POLICY SURVEY OF
PRIMARY CARE PHYSICIANS, 2006


Countries involved are Australia, Canada, Germany, New
Zealand, the Netherlands, the United Kingdom and the
United States
Methods:





The survey consists of interviews with representative samples of primary care
physicians in seven countries using common questionnaire.
Harris Interactive; country affiliates and in the Netherlands, the Center for
Quality of Care Research, Radbound University Nijmegen, conducted interviews
by mail and telephone from late February through July 2006
Survey was conducted in English in the US and Canada.
The margin of sample error ranges from +3 percent to +5 percent, at 95 percent
confidence interval.
Peer Reviewed Publication Citation: Schoen, C., Osborn, R., Huynh, P.T., et al.
On the Front Lines of Care: Primary Care Doctors’ Office Systems, Experiences
and Views in Seven Countries. Health Affairs 25 (2006) w555-w571
51
METHODOLOGY:
SPECIFIC OUTCOMES-MORTALITY RATES







Joint US, Canadian authors from McMaster University, Hamilton,
Canada
Meta-analysis of outcome studies
38 studies meeting most criteria for high quality (only one missed
criteria allowed)
Publish or unpublished prospective or retrospective observational
studies comparing health outcomes data for patients with any age
with same diagnosis in US and Canada
Sources included: EMBASE (1980-Feb 2003), MEDLINE (1966- Feb
2003), healthSTAR (1975-Feb 2003), EBM (2003) and dissertation
abstracts ondisc (1969- Feb 2003).
Results were pooled using a random-effects model
Cochrane’s Q-test was assessed to check heterogeneity and relative
risk was used as a summary statistics
52
Guyatt, G. et al, “A Systematic Review of Studies Comparing Health Outcomes in Canada and the
United States”, Open Medicine 2007;1(1):E27-36
METHODOLOGY: MEASURING THE HEALTH OF
NATIONS: MORTALITY AMENABLE TO HEALTH
CARE, 2008


Comparison of trends in deaths considered amenable to
healthcare in the US, Canada and in 17 other industrialized
countries.
Data and Analysis:





Mortality and population data extracted from WHO files
Data include deaths coded according to ICD-9-CM and ICD-10 by
sex and five-year age band. The general Age limit was set at 75 years.
The causes of death considered are bacterial infection, diabetes, CVD, treatable
cancers, cerebrovascular disease and complications of common surgical procedures.
Age-standardized death rates (SDRs) per 100,000 population by sex was calculated
for years 1998 and 2003.
Peer Reviewed Publication Citation: Nolte, E., & McKee, C. M. (2008). Measuring
the Health Of Nations: Updating An Earlier Analysis. Health Affairs, 27(1), 58-71

Previous Publication Citation: Nolte, E., & McKee, C.M. (2003). Measuring The Health Of Nations:
Analysis Of Mortality Amenable To Health Care. BM, 327, 1129-34
53
54
Chen, Duanjie, and Jack M. Mintz. 2009. “The Path to Prosperity: International Competitive Rates and a Level Playing
Field.” C.D. Howe Institute Commentary. No. 295. Toronto: C.D. Howe Institute. September